BERLIN -- Outside, the night air is laced with wet snowflakes, dancing and swooping against a sky that's been dark since 4 p.m. The smell of industrial-grade grills, roasted chestnuts and petroleum interlace with laughter and the flamboyant hisses of an open pit, as Christmas market patrons mull around in large winter coats, many with a cup of Glühweinin hand.

Inside, Ute Gumz shuttles to and fro within the heated market tent she rented to sell her range of Alpaca-fleece clothing, a business she has dealt in for the past seven years. The 70-year-old southern German sports medium-length white hair with a face that glows. Sorting, explaining, arranging and sorting again, Gumz hardly stops moving -- or laughing, even as she claims to be too old for such an undertaking.

"This here is incredible," admires Gumz, whisking an intricate floral-pattern sweater jacket down from one of the racks. "With every color-change of the pattern, two threads have to be knitted together at the back. That can mean knitting 2,000 threads together, two to three days of handwork for some of these patterns."

Despite her passion for the pieces she sells, Gumz says she isn't holding her breath for a business-breakthrough at this year's Christmas Market at Charlottenburg Palace in Berlin.

"Sales are going well enough, and you wouldn't believe how interesting some people can be," she said. "But honestly, most visitors aren't anticipating something as high-quality as Alpaca wares here, and you can feel that."

Part kitsch and part charm, Germany's famous Christmas markets are simultaneously treasured and loathed, from their centuries-old tradition and economic influence, to over-commercialization and controversy about the long, underpaid hours some workers are expected to put in. Even as online shopping takes off in Germany, its Christmas markets continue to thrive, generating an estimated 3 to 5 billion Euros annually for the country. But striking the delicate balance between profitable and meaningful experiences for both vendors and patrons at the country's so-called Christkindlmärktecould prove critical for the future of the industry.

"Most people are here to eat, drink and make smaller gift purchases," Gumz said. "It could be that I turn an incredible profit by the end of the season, you never know. But that will definitely determine whether I return next year.”

As vendors like Gumz seek reassurance their personal and financial investment is paying off at bigger Christmas markets, small market organizers are experimenting with a variation on traditional formats.

The NowkoellnChristmas Flowmarkt, a small, indoor market for DIY wares, will open its doors for the first time this weekend. The event is a spinoff of the Nowkoelln flea market – a mix of second-hand sellers and DIY vendors, which in three years has grown into a sizable neighborhood event along Berlin’s Maybachufer at the border between the trendy Kreuzberg and Neukölln districts.

“The community makes this happen, the people do the work,” founder Michael Gross said. “The market was needed and it appeared. There was a demand for it."

Gross and his colleagues curate neither the year-round flea market nor the Christmas Flowmarkt. Instead, vendors sign up on a first-come, first-serve basis, relying on the community and word-of-mouth to attract the most appropriate constellation of sellers and buyers to the market. A three-Euro entry fee and vendor contributions help finance the indoor location –- for many, a welcome alternative to the bitter, north-German cold.

Gross says he feels Nowkoelln’s more organic approach to market organization is striking an important chord with the public:

“The immediacy makes it more fun than shopping on the web. You interact with the vendor in front of you, you touch and get to know an item, and maybe you bargain with the vendor in the end… Maybe you found something you can’t get anywhere else… and then you get to take your purchase with you right away.”

Christmas markets have long been prone to over-commercialization. Circus-themed grounds, carnival rides and low-quality, mass-produced wares have long been present on the scene, particularly at some larger markets in tourist-heavy parts of most cities. Though short-term profits may be high here, local patron and tourist attention seems to be shifting towards more unique setups.

The Rixdorfer Weihnachtsmarktin central Neukölln is a three-day Christmas market reserved exclusively for non-profit fundraising. It’s not uncommon to see strapping, uniformed men and women from the city police force or fire brigade doling out Glühwein, turning Bratwurst or selling wares like oil lamps or crafts. Almost all workers volunteer their time.

Founded 40 years ago by a coast guard member and humanitarian hero, “Herr Lemke”, the Rixdorf Christmas Market is now organized by the Neukölln district office –- making it one of the few state-managed Christmas markets left in Berlin.

Remarkably, some 60,000 to 70,000 visitors descend upon the market in only three days, with vendors unofficially reporting record sales for last weekend’s 2012 event.